If I asked five people in your company who owns pricing, would I get the same answer?

Probably not.

Pricing tends to evolve in different directions as a company grows:

• Different salespeople start setting their own negotiation.
• Perhaps an estimator builds the proposal to their own standard.
• Account managers may make their own exceptions.

And operations has to deal with all the consequences.

When we are asked to review a consulting client’s pricing, we typically find a hodgepodge of strategies—some are well thought out, and others are based on “this is how we’ve always done it” or “we let our department managers decide.”

Either way, what worked when you were smaller will not work well as you grow.

Pricing Needs More Structure and Strategy

Someone needs to own your company’s pricing strategy—not individual estimates, but the larger rules and opportunities.

That means setting target margins, throughput rates, labor efficiency expectations, labor and material markups, minimum charges, discounting rules and departmental differences.

Your budget provides the foundation for setting next year’s pricing, but your controller does not own pricing strategy. So who does?

Pricing Should Reflect a Company Strategy

Pricing is more than cost plus overhead. It should reflect the opportunities you are chasing.

Are you trying to increase volume? Improve margins? Enter a new market? Protect limited capacity? Position yourself as the premium provider?

For example, if a division is overloaded with work, your pricing should probably increase. However, if you are intentionally entering a new market, you may price differently to win the right initial clients.

Different Work Requires Different Pricing

Maintenance, enhancements, irrigation, snow and design-build all require different pricing approaches.

They have different labor and material exposure, equipment needs, economic risks and sales cycles. A blanket markup will hide potential opportunities—and liabilities.

Each service line deserves its own pricing logic.

As you develop the strategy, get your team’s input, but don’t treat all input with equal value. For example, some salespeople will always believe the price is too high. Know who you are talking to.

Operations Needs a Voice, Too

Pricing means little if estimating is inaccurate or operations is inefficient.

Estimating and operations should regularly compare estimated versus actual hours, takeoffs and job costs. Their goal should be to eliminate “margin fade” and continually improve estimating accuracy.

Your field results will influence how future work is priced.

Put Rules Around Discounting

Discounting is one of the easiest ways to leak profit.

Who can discount? How much authority do they have? What reasons justify a discount?

Set clear guidelines so small discounts don’t add up to a big bite in profit.

Pro Tip: It’s always better to give away extra product versus extra profit.

Be Deliberate With Annual Increases

Without a zero-based budget, annual increases can become an arbitrary percentage.

Look at wage pressure, cost inflation, density, organizational changes and productivity by client and service line.

One service line or client may deserve a 3% increase, while another may need 8% or even an 18% hike.

Know When to Walk Away

As Kenny Rogers sang in The Gambler, know when to hold ’em and know when to fold ’em and walk away.

Some prospects simply won’t pay enough, and some jobs create too much complexity.

Labor-only work, for example, may consume valuable capacity that is better used on opportunities with higher margins, material markups or enhancement potential.

Winning every hand (proposal) is not the goal. Just the right ones.

Your Challenge: Getting Everyone on Board to the Pricing Strategy

The biggest mistake is not bringing your entire team in line with your pricing strategy.

Whatever your strategy, make sure the team understands both the pricing standards and why they exist.

Make the Why bigger than the How.

Your salespeople need to understand and believe in your costs and underlying budget so they can defend your pricing with confidence and figure out how to sell it.

When everyone understands your company’s particular strategy, you will get better customer conversations, better internal decisions, fewer random exceptions—and stronger overall margins.

When everyone is on the same pricing team, you win!

P.S. If you are making proposals right now for next year, your ’27 budget needs updating right away.

Go get ’em, Jeffrey Scott!

P.S. This is your last week to get tickets for our Summer Growth Summit. You go behind the scenes at real landscape companies, seeing how the best operators run their businesses, price their services, and make money.